Tebaldi, Edinaldo and Mohan, Ramesh (2008): Institutions-Augmented Solow Model And Club Convergence.
Download (209kB) | Preview
Growth economists still face challenges and limitations to incorporate institutions into the standard growth framework. This article develops a simple augmented Solow growth model that accounts for the interactions between institutions and factor-productivity and examine the impacts of the quality of institutions on levels and growth rates of output. The institutions augmented growth model shows that differences in the quality of institutions preclude convergence and determine both the level and the growth rate of output per worker. The model also shows that poor institutions induce poverty traps. Furthermore, the income gap between rich and poor countries will increase if poor countries’ institutions do not improve relative to their rich counterpart.
|Item Type:||MPRA Paper|
|Original Title:||Institutions-Augmented Solow Model And Club Convergence|
|Keywords:||Solow Model, Institutions, Club Convergence, Poverty Traps|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth
I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty
|Depositing User:||Edinaldo Tebaldi|
|Date Deposited:||10. Sep 2008 06:15|
|Last Modified:||12. Feb 2013 18:23|
Acemoglu, D., S. Johnson, and J. Robinson, 2001, The Colonial Origins of Comparative Development: An Empirical Investigation, American Economic Review, 91 (5), 1369-1401.
Baldwin, J. and L. Zhengxi, 2002, Impediments to Advanced Technology Adoption for Canadian Manufacturers, Research Policy, 31(1): 1-18.
Brunetti, A., G. Kisunko, and B. Weder, 1997, Credibility of Rules and Economic Growth - Evidence from a World Wide Private Sector Survey, Background paper for the World Development Report 1997. Washington, DC. The World Bank.
Chong, A. and C. Calderón, 2000, On the Causality and Feedback Between Institutional Measures and Economic Growth. Economics and Politics, 12 (1): 69-81.
Fedderke, J., 2001, Growth and Institutions, Journal of International Development, 13: 645-670.
Gradstein, M., 2002, Rules, Stability and Growth, Journal of Economic Development, 67: 471-484.
Gradstein, M., 2004, Governance and Growth, Journal of Development Economics, 73: 505- 518.
Haucap, J. and C. Wey, 2004, Unionisation Structures and Innovation Incentives, Economic Journal, 114 (494): C149-65.
Huang, H. and C. Xu, 1999, Institutions, Innovations and Growth, American Economic Review, 89(2): 438-443.
Lambsdorff, Johan (1999) Corruption in Empirical Research - A Review, http://www.gwdg.de/~uwvw/Research_area/lambsdorff_eresearch.html.
Mauro, P., 1995, Corruption and Growth, Quarterly Journal of Economics, 110(3): 681-712.
Matthews, R.C.O., 1986, The Economics of Institutions and the Sources of Growth, Economic Journal, 96: 903-918.
North, D.C., 1990, Institutions, Institutional Change and Economic Performance, New York, Cambridge University Press, 1990.
Rodrik, D., A. Subramanian, and F. Trebbi, 2004, Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development, Journal of Economic Growth, 9(2), 131-165.
Sala-i-Martin, X., 2002, 15 Years of New Growth Economics: What Have We Learnt? Central Bank of Chile, Working Paper 172.
Solow, R., 1956, A Contribution to the Theory of Economic Growth, Quarterly Journal of Economics, 70, 65-94.
Tebaldi, E. and B. Elmslie, 2008, Do Institutions Impact Innovation? MPRA Working paper No. 8757, available at: http://mpra.ub.uni-muenchen.de/8757/.
Wei, S-J., 2000, How Taxing is Corruption on International Investors? The Review of Economics and Statistics, 82(1), 1-11.